Employee travel and subsistence expenses

byCarole Jordan

•

17 Jun, 2016

•

From April 6th 2016 taxation of employee expenses changed!Find out how this will affect your business below.

Changes to travel and
subsistence expenses

If your employees’ expenses are valid business expenses then
they are now tax and NI exempt. This means that you will no longer need to
declare them on your P11D 2016/17. This new exemption also applies to
subsistence allowances but it has a limit on it.

Keeping things simple

For small businesses the subsistence allowance (meal
allowance) approved by HMRC for employees is likely to be the most attractive
way of dealing with travel expenses:

One meal allowance per day, in one instance of qualifying
travel:

£5 if the duration of travel is 5 hours or more;

£10 if the duration of travel is 10 hours or
more; or

£25 if the duration of travel is 15 hours of
more, and goes on past 8pm

Employees are entitled to an additional meal allowance per
day, not exceeding £10, if their qualifying travel falls under 1 or 2 and their
travel goes on past 8pm.

Setting your own special rate for subsistence allowance

As an employer you can choose whether to adhere to this
subsistence allowance or set your own special rates. If you already have your
own rates in place, and these were agreed post April 6th 2011, then
they can remain in place. However, if you would like to follow your own rates
in future and do not currently have any then you will have to get them approved
by HMRC first.

I love the summer for sitting back and reflecting on the
year. Thinking back to the dark days of
winter and forward to the joy of Christmas time. Now is the ideal time to review how your
business is going and as you revive yourself through holidays and sunshine
you’ll be well placed to make any changes come the autumn.